Reducing Recessionary Risk in Commercial Real Estate Investments by Christopher Sanz, JD, LLM

Posted on October 28, 2020

Despite the economic volatility and uncertainty caused by the current health crisis, investor activity in commercial real estate remains strong, especially in the net lease space.

Most investors recognize that commercial property with strong fundamentals is generally a part of longer-term portfolio-diversification strategy that is not impacted by the short-term effects of changing economic conditions or wide swings of the public equity markets. By sitting tight and avoiding the urge to sell, patient commercial real estate investors will not record any losses during times of market uncertainty. This is not to say that property investors should sit on their hands and wait-out the pandemic. Rather, investors should use this time to assess their portfolios, shore up capital reserves to take advantage of discounted buying opportunities and build up their resiliency. One way to do this is to put forth efforts to strengthen tenant relationships, helping them adapt their businesses and the property to changing consumer behaviors. These efforts can give you leverage to renegotiate lease terms now, which can pay off in dividends when the economy recovers.

With offices in Miami, Orlando, New York City and Geneva, the team at Orion works with investors, developers, property owners and brokers through all phases of real estate transactions, from strategic planning and analysis to financing, negotiation, property management and disposition. For more information, call (305) 278-8400 or email info@orionmiami.com.